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Debt Advisory's review of 2017 and outlook for the debt markets in 2018 PDF

24 Pages·2017·1.69 MB·English
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MARGIN MARGIN Look back, look forward Debt Advisory Group January 2018 kpmg.com/uk 0 | Look back, look forward © 2018 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN As you settle down back to work “ after a (hopefully) relaxing Christmas break, we wanted to usher in the New Year with some news and views for you from the debt world about the year just gone and the year ahead. I hope that you find them interesting and that 2018 brings you opportunity and success. ” Nick Dodd UK Head of Debt Advisory, Manchester © 2018 KPMG LLP, a UK limited liability partnershSiph aonrdt ah meeamdblbienre fi ir|m 1 of the KPMG network of independent member firms affiliated with 1 | Look back, look forward KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN Contents 2017 snapshot | 4 Look back Headline deals of 2017 | 5 Introduction to 2018 | 9 Look forward Market and sector focus | 11 A global view | 19 Key contacts | 21 © 2018 KPMG LLP, a UK limited liability partnership and a member firm K©ofP 2tMh0eG1 8 KI nPKtMPeMrGnGa nt ieLotLnwPaol, rCak o UooKfp ielnimrdaetitipveedn (ld“iaeKbnPiltiM tmyG ep maInrtbtneeerrnr fsaihtrimiopns a anl”fdf)i ,la ia m tSeewdm iwsbsite her nftiritmy. KoAfPl l tMrhigeGh KtIsnP tMreerGsnea nrtveioetnwda.ol rCko oofp ienrdaetipven (d“eKnPtM mGe mInbteerrn faitrimonsa al”ff)i,l ia tSewd iwssit he ntity. Look back, look forward | 2 All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN Look back 3 | LSohokrt bhaecakd, lilnoeok forward © 2018 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN 2017 snapshot 2017 was another year marked by uncertainty both domestically and internationaly. >£12 billion Historically, such tremors may have been expected to Value of debt significantly impact lender raised appetite and the terms achievable by borrowers, David Reitman but the reaction during the Partner, London year was predominantly benign and largely ‘business as usual’. We may question whether this will continue, but whatever awaits in the year ahead, 2017 produced another strong year for the KPMG Debt Advisory team, advising our clients through complex transactions and helping them to navigate the changing financing landscape. Over the next few pages we highlight a selection of our standout transactions from 2017. 75 Number of clients advised 32 Professional advisors across the UK © 2018 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Look back, look forward | 4 All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN Headline deals of 2017 We advised on a Ian Macleod Distillers – Asset-based number of market- refinancing leading debt Deal led by Bruce Walker, Edinburgh transactions last year We advised Ian Macleod, the independent family-owned distiller, on the refinancing of its existing asset-based lending facilities, as well as raising the additional funding to support its growth plans. — We led a competitive process and the company secured a new £80 million committed inventory-only asset-based facility on competitive terms with improvements in margin, financial covenants and overall flexibility compared to the company’s previous facility. — The five year deal also includes a £10 million accordion option, providing additional growth firepower. IGas – Restructuring Deal led by Tim Nicholson, London — IGas, one of the largest onshore oil and gas E&P businesses, was facing liquidity and covenant pressures under its $160 million secured and unsecured bonds. Complexity was increased by inherent oil price volatility, having multiple creditor groups (with competing objectives) and a hedge- fund backed investor (who held a blocking stake in the bonds) pursuing an alternate strategy for the Group. — We helped the company deliver an innovative restructuring approach and stakeholder management programme that attracted new equity capital to the group, restructured and significantly reduced debt on improved terms, and successfully gained the support of all stakeholders (including the hedge-fund backed investor) to help deliver the group’s strategy. The restructuring created a strong and flexible platform to help deliver considerable value from its portfolio. © 2018 KPMG LLP, a UK limited liability partnership and a member firm 5 | Look back, look forward oKfP tMheG KInPtMerGna ntieotnwaol rCko oofp ienrdaetipveen (d“eKnPtM mGe mInbteerrn faitrimonsa al”ff)i,l ia tSewd iwssit he ntity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN Nisa – Asset-based lending Deal led by Chris Lloyd, Leeds — We acted as lead adviser to Nisa Retail Limited in securing a £120 million Asset Based Lending debt package. — By converting the existing facilities to a full ABL structure, the refinancing has allowed the business to increase its debt facilities with the potential for further support if required. In addition, the new structure provides cheaper and more flexible finance than under Nisa’s previous facilities. Avant Homes – Incremental bank financing Deal led by John Miesner, London — Avant Homes is a developer of contemporary design led mid-market family homes in the North of the UK and was looking to expand its bank facility to accommodate its cornerstone ambitions to build 2,000 houses per annum in the short term; with further growth over the next 5 years. — We advised Avant on the process to source additional lenders and add flexibility to its existing bank agreement. The £200 million facility was provided by a club of four banks and offers significant capacity to support the business through the next stage of its growth plans. Giacom – Acquisition financing Deal led by Chris Lloyd, Leeds — We advised private equity firm Livingbridge on the debt financing to support its investment in Giacom, a specialist cloud services marketplace which provides cloud software, infrastructure and support services to IT consultants serving the SME market. — This followed a lender education process undertaken for Giacom and LDC, the private equity sponsor which exited its majority shareholder position. — This marks the second Giacom financing transaction on which we have advised in twelve months. © 2018 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with Look back, look forward | 6 KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN Look forward 7 | Look back, look forward © 2018 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN © 2018 KPMG LLP, a UK limited liability partnership and a member firm Look back, look forward | 8 of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN MARGIN MARGIN Introduction to 2018 “ Credit markets were largely benign in 2017 and while we believe 2018 will see increased scrutiny and a more cautious approach to risk, a good credit proposition will still attract competitive financing. ” Nick Dodd UK Head of Debt Advisory, Manchester © 2018 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with 9 | Look back, look forward KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN CROP MARKS CROP MARKS MARGIN MARGIN

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